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A month has gone by since the last earnings report for MGIC Investment (MTG). Shares have added about 8.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MGIC due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
MGIC Investment Q3 Earnings Surpass Estimates on Higher Revenues
MGIC Investment reported third-quarter 2024 operating net income per share of 77 cents, which beat the Zacks Consensus Estimate by 15%. Moreover, the bottom line increased 20.3% year over year.
The quarterly results reflected higher new insurance written and improved net investment income, partially offset by lower insurance in force.
MGIC Investment recorded total operating revenues of $306 million, which increased 3% year over year on higher net investment income, net premiums earned and other revenues. The top line matched the consensus mark.
Operational Update
Insurance in force decreased 0.5% from the prior-year quarter to $292.8 billion. The figure matched the Zacks Consensus Estimate as well as our estimate.
The insurer witnessed a 1.5% increase in primary delinquency to 25,089 loans.
Net premiums written decreased 0.2% year over year to $234 million. The figure was lower than our estimate of $237.3 million.
Net investment income increased 12.1% year over year to $62 million. Our estimate was $64.5 million. The Zacks Consensus Estimate was pegged at $64 million.
Persistency — the percentage of insurance remaining in force from one year prior — was 85.3% as of Sept. 30, 2024, down from 86.3% in the year-ago quarter.
New insurance written was $17.2 billion, up 17.8% year over year.
Net underwriting and other expenses totaled $53.3 million, up 0.6% year over year.
For the quarter under review, the loss ratio was 4% compared with 0% for the third quarter of 2023.
Financial Update
Book value per share, a measure of net worth, increased 19% year over year to $20.66 as of Sept. 30, 2024.
Shareholder equity was $5.3 billion as of Sept. 30, 2024, up 4.3% from 2023-end.
MGIC Investment's PMIERs Available Assets totaled $6 billion, or $2.5 billion above its Minimum Required Assets as of Sept. 30, 2024.
Assets were $6.7 billion as of Sept. 30, 2024, up 2.1% from 2023-end. Debt was $644 million as of Sept. 30, 2024, up 0.1% from the 2023-end level.
Capital Deployment
The company bought back 5.2 million shares in the third quarter for $122.9 million.
In the 12 months ended Sept. 30, 2024, MGIC Investment paid $650 million in dividends to the holding company.
In October, MTG repurchased an additional 2.9 million shares for $72.4 million.
The board also declared a dividend of 13 cents per share to shareholders to be paid on Nov. 21, 2024, to shareholders of record as of Nov. 7, 2024.